What Can You Expect to Earn in the Valley?(ritholtz.com)
ritholtz.com
What Can You Expect to Earn in the Valley?
http://www.ritholtz.com/blog/2011/07/what-can-you-expect-to-earn-in-the-valley/?
27 comments
Regarding 2, I learned this a few years ago but "average" refers to any of the central statistics, including median, and even mode. [1] I always refer to the arithmetic mean when I say 'average', though. I make sure I'm clear when I'm referring to something else, like the median or geometric mean.
[1] http://en.wikipedia.org/wiki/Average
[1] http://en.wikipedia.org/wiki/Average
Learn something new every day. :)
Still, in common usage, I would say it's implied that "average" is the arithmetic mean. I guess I technically never said that they're wrong to use the two interchangeably, just that it "worries me."
Still, in common usage, I would say it's implied that "average" is the arithmetic mean. I guess I technically never said that they're wrong to use the two interchangeably, just that it "worries me."
"Palo Alto" is such a nebulous term. If you want to live close to downtown or midtown, $3300/month might get you an "okay" 2 or 3 br/1ba at the moment.
Anywhere nice around there is now over $4k a month, including a lot of apartments.
Anywhere nice around there is now over $4k a month, including a lot of apartments.
4) I'm assuming their housing calculation comes from a single person/family renting and is not dependent on whether or not you have roommates and thus based on the split between them.
$60k in Denver >> $90k in Palo Alto
Awesome points
I have been living in Bay Area for 11 years and here is my take:
- as an engineer, you will never be able to buy a house in Bay Area (at least not so you can live conformable). you will struggle all your life. And don't dream: None of your stock options will be worth shit.
- the schools are horrendous, so expect extra costs for after-school programs or private school
- Bay Area is the best place in the world to be entrepreneur
- Bay Area has the best weather in the world
In short, if you have entrepreneurship aspirations and/or weather is important for you then Bay Area is the place. Otherwise, go somewhere else.
All the big corporations have development centers in other parts of the country. For example, Oracle has a big development center in Nashua, etc.
- as an engineer, you will never be able to buy a house in Bay Area (at least not so you can live conformable). you will struggle all your life. And don't dream: None of your stock options will be worth shit.
- the schools are horrendous, so expect extra costs for after-school programs or private school
- Bay Area is the best place in the world to be entrepreneur
- Bay Area has the best weather in the world
In short, if you have entrepreneurship aspirations and/or weather is important for you then Bay Area is the place. Otherwise, go somewhere else.
All the big corporations have development centers in other parts of the country. For example, Oracle has a big development center in Nashua, etc.
(Blogspam—original source[1].)
> Average salary: Software engineer, Java/Web developer, ...
Java developer and Web developer are two very different job descriptions, and are not necessarily mutually exclusive—I'm guessing that's why there's such a disparity between the US-national median and Silicon Valley median salaries for it.
[1] http://www.focus.com/fyi/silicon-valley-salaries/
> Average salary: Software engineer, Java/Web developer, ...
Java developer and Web developer are two very different job descriptions, and are not necessarily mutually exclusive—I'm guessing that's why there's such a disparity between the US-national median and Silicon Valley median salaries for it.
[1] http://www.focus.com/fyi/silicon-valley-salaries/
This graphic doesn't make living in the valley very appealing, at least financially and especially for those with a family.
I did notice that the graphic doesn't mention any difference in company culture or the quality of the engineers in the Valley. I plan to move my family from Texas to the Valley soon.
According to the graphic this move doesn't really make financial sense but can anyone speak to the engineering culture in the Valley and the advantages it has over other areas?
I did notice that the graphic doesn't mention any difference in company culture or the quality of the engineers in the Valley. I plan to move my family from Texas to the Valley soon.
According to the graphic this move doesn't really make financial sense but can anyone speak to the engineering culture in the Valley and the advantages it has over other areas?
I was a Valley engineer for 20 years before moving to Seattle for the last 10 years. (Lower taxes, better schools, worse weather.) My info may be a little out of date, but I have kept up with valley friends and visit often.
The great thing about the valley is that there are so many tech companies there. If your company culture is poisonous, you can switch to a different company without uprooting your family.
Stock options actually incentivize you to switch every 2-4 years, unless your current company hits it big.
There's no social stigma to switching companies for a better opportunity. Do a good job for a while and you'll develop a network of former co-workers who help you get new jobs.
Overall the family quality of life is very good. It's one big suburb, and the schools are not the greatest, and the South Bay can get pretty boring for teenagers, but the weather is outstanding, and people are generally pretty nice. Since everybody's from somewhere else it is fairly easy to form new friends.
(I don't want to freak you out about the schools -- they are not that bad, especially if you account for the large immigrant and ESL population. It is unfortunately quite expensive to buy a house in a good school district.)
Oh, and the fruits and vegetables are really good!
Good luck!
The great thing about the valley is that there are so many tech companies there. If your company culture is poisonous, you can switch to a different company without uprooting your family.
Stock options actually incentivize you to switch every 2-4 years, unless your current company hits it big.
There's no social stigma to switching companies for a better opportunity. Do a good job for a while and you'll develop a network of former co-workers who help you get new jobs.
Overall the family quality of life is very good. It's one big suburb, and the schools are not the greatest, and the South Bay can get pretty boring for teenagers, but the weather is outstanding, and people are generally pretty nice. Since everybody's from somewhere else it is fairly easy to form new friends.
(I don't want to freak you out about the schools -- they are not that bad, especially if you account for the large immigrant and ESL population. It is unfortunately quite expensive to buy a house in a good school district.)
Oh, and the fruits and vegetables are really good!
Good luck!
According to the "salary buying power" section, Silicon Valley's cost of living is 23% higher than that of NYC. Having lived in both, I'd be very surprised if that's not actually the wrong way around.
NYC to most people includes all the bureaus and sometimes even Jersey City, etc. There are lots of more affordable options (e.g. Astoria) than downtown Manhattan, whereas such options do not exist in Silicon Valley.
If you're willing to include the kind of 60-minute commutes that New Yorkers living in outlying areas have, you can live in all sorts of cheap satellites of SV too, depending on where in the valley your job is. For example, if you work in Cupertino, you can live in Gilroy; for other parts of the valley, you can live in Livermore. There are also cheap parts of the southern East Bay that are pretty nearby.
Even the central part of SV is quite cheap compared to NY for some living profiles. Buying a house is expensive, but renting one is relatively cheap. Going rate for a 2-bedroom house in a tract development in Santa Clara is maybe $1500/mo, while even out in Queens you're not going to find a house at $1500/mo.
I'm not sure where they got the $2250/mo average apartment price from; that seems high. Perhaps it's skewed as a mean, by a few really high-end apartments? It'd be interesting to see how the median compares.
Even the central part of SV is quite cheap compared to NY for some living profiles. Buying a house is expensive, but renting one is relatively cheap. Going rate for a 2-bedroom house in a tract development in Santa Clara is maybe $1500/mo, while even out in Queens you're not going to find a house at $1500/mo.
I'm not sure where they got the $2250/mo average apartment price from; that seems high. Perhaps it's skewed as a mean, by a few really high-end apartments? It'd be interesting to see how the median compares.
Sure, but that's a 60 minute driving commute vs. a 60-minute public transit commute, which makes a big difference to a lot of people (e.g. I can read a book on public transit).
A lot of the statistics are questionable, most certainly including the average apartment cost.
A lot of the statistics are questionable, most certainly including the average apartment cost.
And that's not even factoring in the cost of car ownership, which is at least 4-5x what you pay for a monthly subway pass.
Yep, I'd say most creatives live in Brooklyn due to affordability. Over here, would an equivalent be Oakland?
It depends on what you mean by "creatives." There's a difference between web designers, sculptors and painters. By and large, artists working with physical media have been moving to LA in droves for the past decade. Large studio spaces simply don't exist in the Bay Area at any price - suitable buildings are turned into condos or office space. The situation is similar for NYC artists. Even Jeff Dietch moved to LA, sort of a bellwether for art trends in the country.
For the creatives who stay in SF, the other comment by hugh3 is correct. Most live where you'd expect: the mission, the tenderloin, 6th and Market, etc. Oakland is also popular but not as much as the people who choose to live there make it seem. Artists in SF aren't necessarily living in squalor (or at least any worse squalor than hipster web programmers). My neighbor made a good living painting cartoon robot monsters.
For the creatives who stay in SF, the other comment by hugh3 is correct. Most live where you'd expect: the mission, the tenderloin, 6th and Market, etc. Oakland is also popular but not as much as the people who choose to live there make it seem. Artists in SF aren't necessarily living in squalor (or at least any worse squalor than hipster web programmers). My neighbor made a good living painting cartoon robot monsters.
Creatives also include illustrators, typographers, motionographers, musicians... they are mostly in Brooklyn. Physical media artists are still around, just further pushed to east in Bushwick and East Williamsburg, though I think quite a number have moved to Philly, Seattle, or as you mentioned, LA.
Meh, in San Francisco the starving creative types just live in squalor in the scummier parts of San Francisco.
Completely agreed! I moved from the Bay area to NYC last year and was pretty shocked at how cheap the Bay area was (in relative terms).
FWIW at least some of these numbers are wrong.
For example I calculate the state income tax for a single filer, earning $99,229/yr, taking the standard deduction* , over five years as (((92 229 - 47 056 - 3 657) * .093) + ((47 055 - 37 234) * .08) + ((37 233 - 26 822) * .06) + ((26 821 - 16 995) * .06) + ((26 821 - 16 995) * .04) + ((16 994 - 7 169) * .02) + (7 168 * .01)) * 5 = $32,610.54. A lot, but ten grand less than claimed.
Protip: Look up "marginal tax rate" before you make another infographic.
* This is probably a good place to note that if you're a freelancer and you're not deducting everything, you're paying way too much in taxes.
For example I calculate the state income tax for a single filer, earning $99,229/yr, taking the standard deduction* , over five years as (((92 229 - 47 056 - 3 657) * .093) + ((47 055 - 37 234) * .08) + ((37 233 - 26 822) * .06) + ((26 821 - 16 995) * .06) + ((26 821 - 16 995) * .04) + ((16 994 - 7 169) * .02) + (7 168 * .01)) * 5 = $32,610.54. A lot, but ten grand less than claimed.
Protip: Look up "marginal tax rate" before you make another infographic.
* This is probably a good place to note that if you're a freelancer and you're not deducting everything, you're paying way too much in taxes.
4 of the top 5 of the "upper crust" are web companies. What's a non-web guy to do? Any jobs in other fields around there? (e.g., robotics, embedded, audio..)
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Weird coincidence. The valley average salary was my exact salary to the dollar before I quit.
1) Please do not go thinking that $7.5B in VC deals * 46% are seed/series A = ~$3.2B in seed money. The bulk of that money is skewed upward to the other 54%. If we assume the average size of a deal in the 46% is around $300k (since series A rounds are more and seed rounds are less), then you get about a $100M market for early-stage investments.
2) The section titled "Average Salaries in the Valley" is actually a graph of median salaries. It worries me that the infographic uses the terms "average" and "median" interchangeably, though at least they chose the better statistic for the chart. They also make no mention of stock options or equity that you get with those salaries, so it's not really a total compensation number.
3) The buying power part is completely off base. Having lived in San Diego for 3 years before moving to Palo Alto, I can definitely say I would rather make $92k here than $59k in SD. I imagine they are including all of San Diego County, which is huge and has vast differences in quality of life. Compare that to Silicon Valley, which is generally nice everywhere you go. If you're living in a comparable part of San Diego, I would imagine you are looking at no more than a 10% difference, tops.
4) The cost of housing is also ludicrous. Either the average is getting skewed because of some super expensive listings or they are simply talking about the average price of a lease. I just moved out of a 5 bedroom house in Palo Alto which cost $3300/mo. I was paying $650/mo for my room, which is about $150 less than what I was paying to live in UTC in San Diego and about half the cost of a beach-front apartment rental there.
In summary, there's lies, damned lies, and statistics. Just move here. You'll be glad you did.